What you need to know about payday loans
BDO Debt Solutions
Apr 1, 2021 | 1:50 p.m.
Many people seek payday loans because they are unable to secure traditional financing. Often times, the money is desperately needed for an unforeseen emergency expense that needs to be paid quickly. Payday loans are also generally very easy to obtain, which makes them attractive when you need quick cash. While payday loans often seem helpful at first, they can really put you in financial trouble if you’re not careful. It is important to understand how they work and the risks associated with their use.
Saskatchewan Payday Loan Fees and Interest Rates
In Saskatchewan, lenders are allowed to charge up to $ 17.00 for every $ 100.00 given on a payday loan. This amount should include all types of fees (interest, loan administration fees, processing, application and brokerage fees). The fees are due and payable on the loan repayment date, which is usually only one pay cycle away. The cost of borrowing can therefore add up quite quickly. The fee charged for a missed payment is set at $ 25.00. In Saskatchewan, up to $ 1,500.00 can be borrowed on a payday loan.
To demonstrate the possible charges on a personal loan, suppose you borrow $ 1,000 on a personal loan and the repayment date is 14 days. The cost of borrowing will be $ 17.00 x 10 = $ 170.00. So the total amount you owe in 14 days is $ 1,170.00. To put that in perspective, this works out to an equivalent APR interest rate of 443.21%. Relatively speaking, this type of loan can be quite expensive.